Oct 30, 2013
Where Can I Cash My Dollar Check in Israel?
There has been a US check cashing crisis of sorts in Israel for the past few weeks. There has been very little written about it, and I really have not been able to understand the problem based on the little that has been written. This explains it briefly and offers you a solution..
A guest post by John Benporath
In Israel, the banks charge high fees for converting your currency to Israeli
shekels. They make their profit by charging retail rates that are less than
competitive – often much lower than the exchange rates that you see listed -
and charging additional conversion fees on top.
So what should you do if you
are holding an American dollar check in your hand? Firstly, you should be wary
of any service that offers to process your check electronically. The
bank account on which the check is drawn will be debited by the money changer,
and you will have limited control over the transaction, unlike cashing a check for
the exact amount that is written on the face of the check, which involves no
risk.
You need to choose a reliable money changer who declares all fees and charges up front and offers you a rate that is competitive against the interbank Shaar HaMischar wholesale rate as the independent reference point (see the Montrose Change website for an explanation of the different exchange rates), so that you know exactly what your check is worth. You may decide to hold it for a week and see if the rate improves – no one can predict which way the shekel is moving against the dollar these days - but that choice is yours.
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A guest post by John Benporath
With monthly U.S. Social Security
Checks about to arrive, many Americans in Israel are wondering how to cash
their dollar checks in Israel. Since the beginning of October 2013, a
regulatory clampdown in the United States has closed off many Israeli money changers’
ability to process American checks.
Compliance regulations to prevent
money laundering and tax evasion have become increasingly onerous and costly in
recent years, making more difficult for banks to process checks for people who
were not their customers. It seems that most Israeli money changers were
actually processing checks through one American financial institution, that was
warned by the U.S. regulator that they were exceeding their mandate by
processing these checks. This is now affecting individual Americans living in
Israel who receive dollar checks from friends and family, employment or social
security, or who want to cash checks on their U.S. bank accounts in Israel.
If
you take an overseas bank check to your Israeli bank, they may charge you hefty
fees and it can take up to 4 weeks for the money to reach your account. Banks
have a habit of making things more complicated to confuse their customers, and
it is not uncommon for unexpected transaction fees to be deducted from your
account at the end of the month.
You need to choose a reliable money changer who declares all fees and charges up front and offers you a rate that is competitive against the interbank Shaar HaMischar wholesale rate as the independent reference point (see the Montrose Change website for an explanation of the different exchange rates), so that you know exactly what your check is worth. You may decide to hold it for a week and see if the rate improves – no one can predict which way the shekel is moving against the dollar these days - but that choice is yours.
Despite the current difficulties, Montrose Change is proud
to offer a reliable and professional service to all our clients, including processing
American dollar checks at competitive rates. You can opt to receive its value
in cash, or the funds can be transferred directly into your Israeli bank
account at no extra charge. Call us today to check the day’s rate, which
includes all fees and charges. Today, for example (29/10/13), we will pay out 3,420
NIS for a $1,000 open check, or 3,350 NIS for a $1,000 closed check, written to
a personal name.
We look forward to serving you.
Montrose Change
Email: info@montrosechange.com
Store Telephone: 076 540 6563
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It would be helpful if you clarified the actual fees being paid in % so that people can compare to other money changers. I'll do it for you...
ReplyDeleteThe current rate shown on Globes is 3.51 which means a check for $1,000 should fetch 3,510 nis. Based on the amount you are offering for an open check (3,420) that comes out to an all inclusive fee of roughly 2.5%. For a closed check the fee is around 4.5%.
If we were to compare this to the pre US check crisis, most money changers took a flat fee of around 1% off the check and then around .03 off the quoted exchange rate. In this example that would come to -
$1,000 * .99 = 990
and the 990 * 3.48 = total received of 3,445 for a total fee of 1.85%.
So the fee (at least for an open check) has gone from around 1.85% to 2.5%.
It is important to calculate the total fees in % to get a real idea as to how much your total true all-in cost is.
It pays to research what the other local money changers are currently charging.
I once used Monstrose and they were nice.
ReplyDeleteI am impressed that this post includes actual prices, rather than being like those insulting ads that say, "Call for a price, we'll give you a great deal."
Thanks for the explanation.
the simplest way to do it is to deposit the check into PayPal through their app and then transfer it to your us bank account. using your us bank card in Israel should coat leas the 2.5 % and there are many cards that have no foreign transaction fee at all. the ATM withdrawal fee should be less as well
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